Rutgers alum tells students how to lead a difficult merger

When Keith Banks was an undergraduate at Rutgers University, he took summer jobs as a landscaper and a municipal sanitation worker, "hanging off the side of a truck," as he describes it.

Now, more than 40 years later, the Nutley native is the president of U.S. Trust, Bank of America Wealth Management.

Banks, who graduated summa cum laude in 1977 from Rutgers with a bachelor’s degree in economics, came to the university’s Newark campus Thursday night as a very successful alum, a big donor to the school’s department of economics and the latest guest speaker in the school’s chief executive officer lecture series.

In his introduction, Philip Yeagle, the interim chancellor of Rutgers’ Newark campus, described him as "a fantastic mentor to our students and an indefatigable advocate for our economics department."

In an hourlong talk, titled "Transformation After Change: Leadership Lessons from the Street," Banks gave Rutgers business students in Bove Auditorium a sense of what the shake-up of a large wealth management operation looks like from the top.

Daunting task

Banks, who began his financial services career more than 30 years ago as an equity analyst after taking an MBA from Columbia University, spent 16 years in various roles at JPMorgan Chase & Co. and is a former head of asset management for FleetBoston Financial. He joined Bank of America with the 2004 purchase of Fleet, and four years ago he was given the daunting task of combining U.S. Trust and Bank of America’s private banking businesses, soon after Bank of America had acquired U.S. Trust in 2007.

That meant traveling around the country to meet with U.S. Trust employees for "unfiltered feedback," which included plenty of eye rolling and checking of wristwatches.

"What we acquired was already an acquisition-weary set of employees and an acquisition-weary base of clients," he said.

U.S. Trust, which dates to before the Civil War, had been struggling for years and had already been shaken up by its acquisition a few years earlier by Charles Schwab.

"In their minds, it was like, ‘Here we go again,’ " Banks said. "We had a real cultures clash with legacy U.S. Trust and Bank of America folks, and a year later we experienced the worst financial crisis since the late 1920s."

On top of all that, Banks said, the 4,500-employee operation’s costs were too high, the pretax profit margin was too low and so was employee morale and client satisfaction.

Then after the financial collapse in 2008, Bank of America’s stock fell to $4 a share from more than $50, and clients worried that the bank could fail.

The three-year turnaround plan required no small amount of "managerial courage," as he described it, to make sweeping changes that affected people’s livelihoods but made the company more efficient and more competitive. He removed ineffective leaders, increased accountability and restructured employee pay to make it more aligned with performance.

The job is not finished, he said, but by the end of last year "we had made a significant turnaround," said Banks — who said he could not be more specific because the numbers had not yet been made public.

"Our negative [asset] flows became significantly positive," he said. "Margins were quite low and they were up 2 1/2 times higher. Employee satisfaction was way up because they were starting to win."

Rutgers alum tells students how to lead a difficult merger

When Keith Banks was an undergraduate at Rutgers University, he took summer jobs as a landscaper and a municipal sanitation worker, "hanging off the side of a truck," as he describes it.

Now, more than 40 years later, the Nutley native is the president of U.S. Trust, Bank of America Wealth Management.

Banks, who graduated summa cum laude in 1977 from Rutgers with a bachelor’s degree in economics, came to the university’s Newark campus Thursday night as a very successful alum, a big donor to the school’s department of economics and the latest guest speaker in the school’s chief executive officer lecture series.

In his introduction, Philip Yeagle, the interim chancellor of Rutgers’ Newark campus, described him as "a fantastic mentor to our students and an indefatigable advocate for our economics department."

In an hourlong talk, titled "Transformation After Change: Leadership Lessons from the Street," Banks gave Rutgers business students in Bove Auditorium a sense of what the shake-up of a large wealth management operation looks like from the top.

Daunting task

Banks, who began his financial services career more than 30 years ago as an equity analyst after taking an MBA from Columbia University, spent 16 years in various roles at JPMorgan Chase & Co. and is a former head of asset management for FleetBoston Financial. He joined Bank of America with the 2004 purchase of Fleet, and four years ago he was given the daunting task of combining U.S. Trust and Bank of America’s private banking businesses, soon after Bank of America had acquired U.S. Trust in 2007.

That meant traveling around the country to meet with U.S. Trust employees for "unfiltered feedback," which included plenty of eye rolling and checking of wristwatches.

"What we acquired was already an acquisition-weary set of employees and an acquisition-weary base of clients," he said.

U.S. Trust, which dates to before the Civil War, had been struggling for years and had already been shaken up by its acquisition a few years earlier by Charles Schwab.

"In their minds, it was like, ‘Here we go again,’ " Banks said. "We had a real cultures clash with legacy U.S. Trust and Bank of America folks, and a year later we experienced the worst financial crisis since the late 1920s."

On top of all that, Banks said, the 4,500-employee operation’s costs were too high, the pretax profit margin was too low and so was employee morale and client satisfaction.

Then after the financial collapse in 2008, Bank of America’s stock fell to $4 a share from more than $50, and clients worried that the bank could fail.

The three-year turnaround plan required no small amount of "managerial courage," as he described it, to make sweeping changes that affected people’s livelihoods but made the company more efficient and more competitive. He removed ineffective leaders, increased accountability and restructured employee pay to make it more aligned with performance.

The job is not finished, he said, but by the end of last year "we had made a significant turnaround," said Banks — who said he could not be more specific because the numbers had not yet been made public.

"Our negative [asset] flows became significantly positive," he said. "Margins were quite low and they were up 2 1/2 times higher. Employee satisfaction was way up because they were starting to win."